An Intense workshop mode course on Industrial Relations to the participants of Executive MBA at Chandragupt Institute of Management, Patna, March 2017, attended by the senior executives of Bihar State Government

1. Industrial relations/
employee relations in organisations
Perspectives for Executives in
Government
Opening Session
A short Course for participants of Executive MBA,
Batch 1, 2017-18,
CIMP,
1-7 March 2017
Prof. Ramana Acharyulu

2. Course objectives
1. To offer a brief overview of the importance and significance of
employee relations for better managing people in an organisation –
crux of HRM
2. To offer a broad perspective of industrial relations and their
influence on organisational success and performance
3. To offer a broad understanding of the legal and policy framework
that exists in area of employee relations
4. To learn the role of negotiation and conflict management skills in
industrial/ employee relations

3. Session plan
• Session 1: Industrial Relations/ Employee Relations – the changing
context in Indian scenario
• Session 2: Role of IR in HRM of an organisation – the case of Indian
Banking Industry
• Session 3: The Legal Framework and Laws that deal with Industrial
Relations in India
• Session 4: Trade Unions and Employee Associations – their role in
organisations – The case of Blow-Plast Pvt ltd
• Session 5: Management of Industrial Conflict – the case of Maruti
Suzuki India Ltd
• Session 6: Negotiation and Conflict Management Skills – essential
models and principles

4. G U N G - H O
• Let’s watch few clips….
• Each clip is of 2—3 min duration
• Kindly make one / two points on watching each of these…

5. Overview of Industrial
Relations
Industrial Relations – Session 1

6. Define Industrial Relations..
• The concept of industrial relations describes the
relationship between the employees and
management in the day to day working of an
industry.
• According to International Labor Organization
(ILO): industrial relations deal with either
relationship between the state and employers’
and workers organizations or the relations
between the occupational organizations
themselves.

7. Nature of Industrial Relations
• Concerned with relationship of management and
workers.
• To protect the interests of employees
• Concerned with systems, rules and procedures used
by unions & employees
• Role of regulatory mechanism in resolving any
industrial disputes.

8. Objectives of Industrial Relations
• To maintain industrial democracy based on participation
of labour in the management and gains of industry.
• To raise productivity by reducing tendency of high labour
turnover and absenteeism.
• To ensure workers’ participation in management of the
company by giving them a fair say in decision-making
and framing policies.
• To establish a proper channel of communication.
• To increase the morale and discipline of the employees.

9. Objectives.. Cont’d
• To safeguard the interests of the labour as well as
management by securing the highest level of mutual
understanding and goodwill between all sections in an
industry.
• To avoid all forms of industrial conflicts so as to ensure
industrial peace by providing better living and working
standards for the workers.
• To bring about government control over such industrial
units which are running at a loss for protecting the
livelihood of the employees.

10. Importance of Industrial Relations
• Uninterrupted Production:
• IR ensures continuity of production.
• Continuous employment for all involved right from managers to workers.
• Uninterrupted flow of income for all.
• Smooth running is important for manufacturers, to handle perishability and to consumers if the
goods are for mass consumption and regular consumption (essential commodities, food grains
etc.).
• Good industrial relations bring industrial peace which in turn tends to increase production.
• Contributes to economic growth and development.

11. Parties to IR
Employer-
Employee Relations
Employees
Employee
Associations
Government Courts &
Tribunals
Employer
Associations
Employers

12. The Actors in a System:
The actors are:
(a) hierarchy of managers and their representatives in
supervision
(b) a hierarchy of workers (non-managerial) and any
spokesmen
(c) specialised governmental agencies (and specialised
private agencies created by the first two actors) concerned
with workers, enterprises, and their relationships.

13. Evolution of Industrial Relations in india
The protective phase
(1947-1956)
Conflict Ridden
Interventionist phase
(1967-1980)
The productivity-,
Efficiency-. Quality-
orientation phase
(1981-1991)
The consolidation
Phase
(1956-1965)
The post reform
decade
(1992-till now)

14. Industrial Relations during 1st / 2nd World
Wars
• The First World War was an opportunity in disguise for local factories in India.
• Prices of virtually all products went up and profits soared, however, wages of lower employees were still the same.
• There were various strikes and disputes between management and employees.
• Workmen's Compensation Act (1923),
• the Trade Union Act (1926), and
• the Trade Disputes Act (1917) were promulgated.
• Besides wages, employees were given a share of profits made by the firm.
• Strikes, however, were sometimes prohibited under the Emergency Rules.
• Following World War II, the Industrial Employment Act (1946) and Industrial Disputes Act (1947) were
brought in.

15. Post-Independence Industrial Relations
• The post-independence era saw a developing relation between industry and labour.
• A conference called the Industrial Truce Resolution took place in 1947, and foresaw
the establishment of:
• the Minimum Wages Act,
• Factories Act, and
• Employees State Insurance Act in 1948.
• This ensured peace between labour and industry. While industrial relations in India
have evolved a long way, some features of the early system still exist today.

16. Evolution of Indian Industrial
Relations
The protective phase (1947-66; 1st & 2ndfive-year plans):
• Import-Substitution Industrialization.
• National capitalism
• Economy grows @ 2%-3%/year.
• Formation of large employment- intensive public enterprises.
• Largely centralized bargaining with static real wages. Relative industrial peace.

17. Evolution of Indian Industrial
Relations
The ConsolidationPhase(1956-1965)
• There should be no lockout or strike without notice.
• No unilateral action should be taken in connection with any industrial matter.
• There should be no recourse to ”go-slow tactics”.
• No deliberate damage should be caused to plant or property.
• Awards and agreements should be speedily implemented.

18. Evolution of Indian Industrial Relations
Conflict RiddenInterventionist phase (1967-80; 4th & 5th five -year plans):
• Economic stagnation.
• Economy grows at @ 2%/year ; two oil price shocks
• Considerable slowdown in employment growth and declining real wages.
• Crisis in IR system: massive strikes & industrial conflict, multiple unionism
& decline in strength. Conflict, multiple unionism & decline in strength.
• Government loosing control over the IR system.

19. Evolution of Indian Industrial
Relations
The productivity- Efficiency- Quality- orientation phase (1981-91; 6th & 7th five-year
plans):
• Initial domestic economic liberalization; economy grows @ 5.7%/year.
• Regional variation in economic development increases.
• Variation in wage growth: skilled versus unskilled, labour productivity increases,
period of ‘jobless 'growth.
• Rise of ‘independent 'enterprise unionism.

20. Evolution of Indian Industrial
Relations
The Post-Reform Decade, 1992-2009
• Stabilization & Structural Adjustment Reforms: Economy grows @ 6.2%-
6.5%
• In the five years (2004-09) growing @ 7%-8%/year.
• Regional variation increases massively.
• Max growth in services: IT, IT-enabled services, ‘hotels, trade & restaurants’’,
but also in autos & ancillaries; more recently in overall manufacturing.

21. Causes of poor Industrial Relations
• Economic causes:
• Poor wages and poor working conditions
• Unauthorised deductions from wages,
• Lack of fringe benefits,
• Absence of promotion opportunities,
• Faulty incentive schemes are other economic causes.
• Other causes for Industrial conflicts are:
• Inadequate infrastructure,
• Worn-out plant and machinery,
• Poor layout, unsatisfactory maintenance etc.
• Organisational causes: Faulty communications system, unfair practices,
non-recognition of trade unions and labour laws

22. Maruti Suzuki – Manesar Unrest
• The peace of the last twenty years in Industrial Relations (IR) has
been ruffled by the recent bitterly fought Maruti Suzuki conflict
between labour and management.
• The Maruti Suzuki strike has brought to the several issues that have
been silently plaguing IR over the years…
• Kindly read the case circulated to all of you and come prepared for
discussions in the class
• The issues for class discussions are:…..

23. Questions/issues for case analysis
• Who are the key actors whose approaches and actions lead to the
state of affairs in MSIL? What role did they play in MSIL?
• Why was there managerial indifference towards Manesar workers?
• What other factors contributed to IR breakdown in Manesar plant?
• What cross-cultural issues need attention to avoid such problems in
future? Is increasing ethno-centrism a good sign in HR of MSIL?
• Was there a discrepancy between the projected and actual roles
played by state agencies in the case? Yes/No, explain…
• What do you think would have happened if the Chief of HR was not
killed but only injured like others?
• Should MSIL adopt an ”empowerment” HR strategy or ”fit” HR
strategy to pursue its growth and profit goals?
• What are the lessons to be learnt from the case?

24. Few contrasting cases for discussion
- Eicher tractors factory at Alwar, Rajasthan
- Tata Motors, Pune/ Bajaj Auto, Pune
- The decline of Textile mills in Mumbai
- The Gandhian approach at Jamalpur Railway workshop, Bihar
- Four Teams to work on to analyse and present salient aspects of the above cases –
Dates for presentation to be announced separately

25. Approaches for industrial relations
• Broad framework – to be examined in depth through in-depth
assignments of volunteering participants… core issues to be
examined…
• As following in next slides…

26. Unitary perspective
• In unitarism, the organization is perceived as an integrated and
harmonious whole with the ideal of "one happy family", where
management and other members of the staff all share a
common purpose, emphasizing mutual cooperation.
Furthermore, unitarism has a paternalistic approach where it
demands loyalty of all employees, being predominantly
managerial in its emphasis and application.
• Consequently, trade unions are deemed as unnecessary since
the loyalty between employees and organizations are
considered mutually exclusive, where there can't be two sides
of industry.

27. Pluralist perspective
• The organization is perceived as being made up of:
• powerful and divergent sub-groups,
• each with its own legitimate loyalties and
• with their own set of objectives and leaders.
• In particular, the two predominant sub-groups in the pluralist perspective are the management and trade
unions.
• The role of management:
• enforcing and controlling and
• toward persuasion and co-ordination.
• Trade unions are deemed as legitimate representatives of employees,
• Conflict is dealt by collective bargaining and
• Viewed - not necessarily as a bad thing and, if managed well, could in fact be channelled towards
evolution and positive change.

28. DUNLOP’S APPROACH
• Dunlop defines an industrial relations system in the following way:
An industrial relations system at any one time in its development is regarded as
comprised of certain actors, certain contexts, an ideology, which binds the industrial
relations system together, and a body of rules created to govern the actors at the
workplace and work community.

29. THE INDUSTRIAL SOCIOLOGY APPROACH
• G. Margerison, an industrial sociologist, holds the view that the core of
industrial relations is the nature and development of the conflict itself.

30. ACTION THEORY APPROACH
•The action theory approach takes the collective
regulation of industrial labour as its focal point.
The actors operate within a framework, which can
at best be described as a coalition relationship.

31. THE HUMAN RELATIONS APPROACH
• In the words of Keith Davies, human relations are “the integration of people into a
work situation that motivates them to work together productively, cooperatively
and with economic, psychological and social satisfactions.” According to him, the
goals of human relations are:
• (a) to get people to produce
• (b) to cooperate through mutuality of interest
• (c) to gain satisfaction from their relationships.

32. Marxist approach
• Regard conflict between employees and employers as inevitable
• They believe that conflict is a result of capitalist society
• Industrial conflict is seen as synonymous with social and political
unrest, that challenges the class system in the society
• Trade unions are seen as labour reaction to exploitation by capital
and are seen as a weapon to bring about social change

33. THE GANDHIAN APPROACH
• Workers should seek rebred of just and reasonable demands through
collective actions.
• Trade unions should decide to go on strike taking ballot authority from all
workers, and remain peaceful using non violent methods.
• Workers should avoid strikes to the extent possible.
• Strikes are to be the last resort
• Workers should take recourse to voluntary arbitration where direct
settlement fails.

34. Thank You